Archive for November 1st, 2011

SYRACUSE, N.Y., Oct. 31, 2011 /PRNewswire/ — Patients looking for a dentist in Spartanburg, South Carolina now have a new dental care provider choice with a opening of a new Aspen Dental bureau in November. The new practice, that opens on November 10 during 1490 Wo Ezell Blvd., will provide

SYRACUSE, N.Y., Oct. 31, 2011 /PRNewswire/ — Patients looking for a dentist in Peru, Illinois now have a new dental care provider choice with a opening of a new Aspen Dental bureau in November. The new practice, that opens on November 10 during 5301 Route 251, will yield dental services

Scott loves a Flyers, Phillies, music, sports, photography and all things local to a Delaware Valley and a Jersey Shore. So distant in life, in a difference of Jimmy Buffett, he has enjoyed flourishing comparison though not up!

LANCASTER — Blue Star Mothers Chapter 10 will boat about 50 pounds of candy to soldiers stationed abroad this month since of a efforts of inexhaustible trick-or-treaters and a Lancaster dental office.

The bureau of Glenn R. Burns and Jennifer J. Lape on North Columbus Street conducted a two-hour Cash for Candy expostulate Monday in that internal children could accept $1 for each bruise of unopened Halloween candy they brought in.

Children were speedy to wear their Halloween costumes, and tiny trophies were given out for a scariest, funniest and best dressed.

Are we some-more like a batch or like a bond? That’s one doubt you’ll need to answer when we muster a judgment of tellurian collateral to variegate and build your wealth.

Two Forms of Wealth

Think of your sum resources as stoical of dual parts, tellurian collateral and financial capital. Human collateral is tangible as a benefaction value of your approaching destiny labor income during your operative lifetime.¹You radically modify tellurian collateral to financial collateral by saving and investing a apportionment of your practice gain over a march of your career.

Generally speaking, a value of your tellurian collateral peaks a day you

Are you more like a stock or like a bond? That’s one question you’ll need to answer when you deploy the concept of human capital to diversify and build your wealth.

Two Forms of Wealth

Think of your total wealth as composed of two parts, human capital and financial capital. Human capital is defined as the present value of your expected future labor income during your working lifetime.¹You essentially convert human capital to financial capital by saving and investing a portion of your employment earnings over the course of your career.

Generally speaking, the value of your human capital peaks the day you start your career, since you have all of your years of wages ahead of you. By contrast, your financial wealth is typically lowest at this point, since you haven’t yet had a chance to save and invest. As you age, you are steadily using up your earning power, so the value of your human capital gradually declines. Fortunately, your financial capital steadily increases as you save, invest and compound your labor earnings over decades in financial markets.

Growing and Shrinking Wealth

Consider Susan, who begins work at age 25 at a salary of $60,000. Susan’s salary grows 3% a year with inflation; she habitually socks away 10% of income in savings; Susan works 42 years until her “normal” retirement age of 67. At the start of Susan’s career, the value of her human capital is around $1 million². If she starts her career with $30,000 of savings, then 97% of the value of Susan’s total wealth is comprised of human capital. At some point in the middle of Susan’s career, probably when she’s in her early to mid-50s, the two lines cross and the value of her steadily growing financial capital will exceed that of her steadily shrinking human capital. By the time she retires at 67, her human capital is depleted (except for social security), but she has well in excess of $1 million in financial wealth (more than 90% of total wealth now) to see her through retirement³.

With this framework, let’s see how you can integrate the concept of human capital into your portfolio allocation. First, as your financial adviser has counseled you, when you’re young and in the “accumulation” phase of your investing life, you should probably be investing most of your long-term capital in “risky assets” such as stocks and relatively little in lower volatility, lower expected return assets such as bonds. Looked at from a human capital vantage point, you’re able to take more investment risk when your total wealth is dominated by your human capital (and you have more time to recoup investment losses over a long time horizon). As you age and your human capital dwindles and your financial capital grows, you’ll likely gradually shift to a more conservative portfolio.

Job Risk and Investing

Now let’s consider how to take the risk and return characteristics of your employment into account when you invest in financial assets. Since we’re seeking total wealth diversification and to control risk, one obvious tactic is to avoid investing heavily in your employer’s stock. Just recall what happened to the poor souls at Enron who had the bulk of their retirement savings tied up in their ill-fated employer’s stock. If your employer falls apart, you don’t want both your human and financial capital to be simultaneously devastated. For the sake of portfolio diversification, you’re better off investing in assets that are uncorrelated with your employer’s stock and line of business.

Let’s look at the risk profiles of professions and how that might affect your portfolio allocation. A risky job is more stock-like; a safe job is closer to a risk-free bond. Let’s say Susan is a stockbroker or other securities industry professional whose income, bonuses and commissions fluctuate each year based on stock market performance. Thus, her labor income is both volatile and highly correlated with financial markets. Therefore, since Susan’s human capital resembles a stock, she should hedge and diversify by investing more heavily in risk-free bonds.

Alternatively, if Susan is, say, a tenured professor, civil servant or dentist, her labor income is quite safe and stable. In this case, her human capital is more bond-like, so she can invest more in stocks and take more risk in her investment portfolio. Thus, to balance and diversify human capital, all things equal, a stockbroker should invest less in the stock market than a tenured professor.